To Seek Bad Faith Tort Damages There Must be Injury in Excess of Policy Benefits
Post 5205
Read the full article at https://www.linkedin.com/pulse/payment-appraisal-award-precludes-bad-faith-claim-zalma-esq-cfe-rkzrc and at https://zalma.com/blog plus more than 5200 posts.
In Keith Frederich v. Trisura Specialty Insurance Company, No. 24-40748, United States Court of Appeals, Fifth Circuit (October 7, 2025) explained that an insured cannot maintain tort claims against an insurer if the insured has received the full appraisal award, absent evidence of an independent injury.
FACTS
Keith Frederich sued his insurer, Trisura Specialty Insurance Company ("Trisura" ), for allegedly violating the Texas Insurance Code. He appealed the grant of summary judgment in favor of Trisura.
Trisura moved for summary judgment, arguing that its payment of the appraisal award plus interest foreclosed Frederich's claims. Frederich countered that Chapter 541 allows an insured to recover tort damages that are cumulative to, and distinct from, any breach-of-contract damages. The district court granted summary judgment in favor of Trisura, concluding that Frederich had received all benefits to which he was entitled through the appraisal process and had failed to establish an independent injury.
ANALYSIS
On appeal, Frederich contended that Chapter 541 allows an insured to recover tort damages that are independent and distinct from contractual damages for breach of contract.
Trisura argued that its payment of the appraisal award plus statutory interest foreclosed all of Frederich's claims under Chapter 541. The Fifth Circuit affirmed the district court's judgment, holding that an insured cannot bring tort claims against an insurer under Chapter 541 after receiving an appraisal award and applicable statutory interest, absent an independent injury.
The Fifth Circuit explained that an insured cannot maintain tort claims against an insurer if the insured has received the full appraisal award, absent evidence of an independent injury.
Frederich's argument failed under the Fifth Circuit’s decision in Mirelez v. State Farm Lloyds, 127 F.4th 949 (5th Cir. 2025). Like Frederich, Mirelez asserted he could recover tort damages even when an appraisal award, any applicable interest, and any payments due under the insurance policy were paid out.
Because Mirelez sought no actual damages other than the policy benefits paid in accordance with the policy's appraisal provision, he could not maintain a bad faith claim under either the common law or chapter 541.
Mirelez foreclosed the insured's appeal because even if the plaintiff in Mirelez had raised the same statutory-construction argument, the panel would have rejected it as foreclosed by the Texas Supreme Court's interpretation of Chapter 541.
In sum, Mirelez foreclosed Frederich's appeal. Absent an independent injury, an insured cannot bring tort claims against an insurer under Chapter 541 after receiving an appraisal award and applicable statutory interest.
ZALMA OPINION
Bad faith suits in Texas require, among other things, damages other than a common law breach of contract. When, as here, Frederich's claims were paid in full after appraisal. As a result he incurred no damages in excess of the claim amount which was paid in full plus interest.
(c) 2025 Barry Zalma & ClaimSchool, Inc.
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Anti-Public Adjuster Clause Is Effective in New York
Post number 5301
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Insurers May Contractually Prevent an Insured from Hiring a Public Adjuster
In Peter Barbato & North Jersey Public Adjusters Inc. v. Interstate Fire & Casualty Company, et al, No. 25-cv-5312 (JGK), United States District Court, S.D. New York (December 15, 2025) the plaintiffs, Peter Barbato and North Jersey Public Adjusters, Inc. (“NJPA”), filed suit against several insurance companies, including Interstate Fire & Casualty Company, Independent Specialty Insurance Company, and certain Underwriters at Lloyd’s of London.
FACTS
NJPA is a New Jersey-based public adjusting firm licensed in New York. The dispute centers on ...
Anti-Public Adjuster Clause Is Effective in New York
Post number 5301
Read the full article at https://www.linkedin.com/pulse/public-adjusters-attempt-represent-insured-subject-zalma-esq-cfe-rubfc, see the video at and at and at https://zalma.com/blog plus more than 5300 posts.
Insurers May Contractually Prevent an Insured from Hiring a Public Adjuster
In Peter Barbato & North Jersey Public Adjusters Inc. v. Interstate Fire & Casualty Company, et al, No. 25-cv-5312 (JGK), United States District Court, S.D. New York (December 15, 2025) the plaintiffs, Peter Barbato and North Jersey Public Adjusters, Inc. (“NJPA”), filed suit against several insurance companies, including Interstate Fire & Casualty Company, Independent Specialty Insurance Company, and certain Underwriters at Lloyd’s of London.
FACTS
NJPA is a New Jersey-based public adjusting firm licensed in New York. The dispute centers on ...
Proof of Highly Contaminated Water is Required for Extra Payments
Post number 5300
Read the full article at https://www.linkedin.com/pulse/acting-your-own-lawyer-foolish-barry-zalma-esq-cfe-mbg0c, see the video at and at and at https://zalma.com/blog plus more than 5300 posts.
Acting as Your Own Lawyer is Foolish
Evidence of Breach of Contract Survives Dismissal of All Other Charges
In Lee Lifeng Hsu and Jane Yuchen Hsu v. State Farm Fire And Casualty Company, C. A. No. N24C-09-020 CLS, Superior Court of Delaware (February 27, 2026) a claim to State Farm who paid approximately $61,000 after assessments but denied coverage for additional items including ceramic tiles, the kitchen floor ceiling, underlayment plywood, and numerous personal property items resulted in suit by the Hsu’s acting in pro per.
Facts
Lee Lifeng Hsu and Jane Yuchen Hsu (“Plaintiffs”) purchased a homeowners’ insurance policy from State Farm Fire...
Insurance Condition Requires Following the Intent of the Parties
Post number 5307
Principles of Contract Interpretation Compels Reading Contract as Written
Read the full article at https://www.linkedin.com/pulse/portable-storage-containers-buildings-barry-zalma-esq-cfe-fkg1c and at https://zalma.com/blog.
In Eastside Floor Supplies, Ltd. v. SCS Agency, Inc., Hanover Insurance Company, et al., No. 2024-01501, Index No. 609883/19, 2026 NY Slip Op 01488, Supreme Court of New York, Second Department (March 18, 2026)
In May 2019, a fire damaged business personal property belonging to the plaintiffs, which was stored in portable storage containers at their Manhattan premises. At the time of the fire, the plaintiffs were insured under a businessowners insurance policy (BOP) issued by the defendant Hanover Insurance Company which provided general coverage for business personal property, and which included a specific extension for “Business Personal Property Temporarily in Portable Storage Units” (the portable storage ...
ERISA Saves Fraudulent Claims Suit
Post number 5306
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Allegations of Fraudulent Insurance Billing Must be Pleaded with Specificity
In Genesis Laboratory Management LLC v. United Healthcare Services, Inc. and Oxford Health Plans, Inc., No. 21cv12057 (EP) (JSA), United States District Court, D. New Jersey (March 13, 2026) Genesis Laboratory Management LLC (“Genesis”), a New Jersey-based molecular diagnostic and anatomic pathology laboratory, provided COVID-19 related testing services and submitted claims for reimbursement as an out-of-network provider to United Healthcare Services, Inc. (“United”) and Oxford Health Insurance, Inc. (“Oxford”). Metropolitan Healthcare Billing, LLC (“Metropolitan”), owned by the same individual as Genesis, handled the billing for Genesis.
FACTUAL BACKGROUND
United and Oxford, who administer both ERISA and ...
ERISA Saves Fraudulent Claims Suit
Post number 5306
Read the full article at https://www.linkedin.com/pulse/failure-provide-well-pled-facts-defeats-most-action-zalma-esq-cfe-b4zuc and at https://zalma.com/blog plus more than 5300 posts.
Allegations of Fraudulent Insurance Billing Must be Pleaded with Specificity
In Genesis Laboratory Management LLC v. United Healthcare Services, Inc. and Oxford Health Plans, Inc., No. 21cv12057 (EP) (JSA), United States District Court, D. New Jersey (March 13, 2026) Genesis Laboratory Management LLC (“Genesis”), a New Jersey-based molecular diagnostic and anatomic pathology laboratory, provided COVID-19 related testing services and submitted claims for reimbursement as an out-of-network provider to United Healthcare Services, Inc. (“United”) and Oxford Health Insurance, Inc. (“Oxford”). Metropolitan Healthcare Billing, LLC (“Metropolitan”), owned by the same individual as Genesis, handled the billing for Genesis.
FACTUAL BACKGROUND
United and Oxford, who administer both ERISA and ...
